Robert Lighthizer may not become part of the Trump Administration this time around! Does this mean the death of 20% across the board tariffs??? I hope so!
Robert Lighthizer and gang had the oh so brilliant idea to implement an across the board 20% tariff on… everything. Which would have destroyed the United States economy. But now he might not become part of the Trump Administration!
Why Lighthizer isn’t joining the administration isn’t 100% clear. Regardless it’s a good thing. Lighthizer seemed to be a tariff extremist and probably would’ve pushed for ever higher tariffs in the mistaken belief that they would stimulate the US economy and domestic manufacturing.
I cannot emphasize enough that setting up a factory in the United States is not easy and that tariffs are not paid by countries, but ultimately by consumers. Those are both concepts the Trump Administration and Lighthizer did not apparently understand.
But despite Lighthizer not joining the Trump Admninistration, we’re still going to get tariffs. How big and on what are still unclear. And President Elect Donald Trump may very well stick to 20% tariffs on a good number of things. We don’t know how this is going to turn out yet.
But we can be optimistic. We can hope that someone convinces the Trump Administration that free trade is far superior to tariffs and that industries needing support should get funding from the United States government. The CHIPS Act for example is a good start to stimulating the American semiconductor ecosystem. I believe that even a CHIPS Act II is necessary for the safety of America’s semiconductor supply.
These are difficult times already. And they’re only going to become more difficult. The loss of a what is basically an extremist from the Trump Administration is for the good. It’s one less thing to worry about. Let’s also hope he is not replaced by another extremist. For our wallets sake and the economy’s sake.